N.Y. Urban development research corporation act 173/68 § 16: Reserve funds

§ 16. Reserve funds. (1) The corporation may create and establish one

or more reserve funds to be known as debt service reserve funds and may

pay into such reserve funds (a) any proceeds of sale of bonds and notes

to the extent provided in the resolution of the corporation authorizing

the issuance thereof, and (b) any other moneys which may be made

available to the corporation for the purposes of such funds from any

other source or sources. The moneys held in or credited to any debt

service reserve fund established under this subdivision, except as

hereinafter provided, shall be used solely for the payment of the

principal of bonds of the corporation secured by such reserve fund, as

the same mature, the purchase of such bonds of the corporation, the

payment of interest on such bonds of the corporation or the payment of

any redemption premium required to be paid when such bonds are redeemed

prior to maturity; provided, however, that moneys in any such fund shall

not be withdrawn therefrom at any time in such amount as would reduce

the amount of such fund to less than the maximum amount of principal and

interest maturing and becoming due in any succeeding calendar year on

the bonds of the corporation then outstanding and secured by such

reserve fund, except for the purpose of paying principal and interest on

the bonds of the corporation secured by such reserve fund maturing and

becoming due and for the payment of which other moneys of the

corporation are not available. Any income or interest earned by, or

increment to, any such debt service reserve fund due to the investment

thereof may be transferred to any other fund or account of the

corporation to the extent it does not reduce the amount of such debt

service reserve fund below the maximum amount of principal and interest

maturing and becoming due in any succeeding calendar year on all bonds

of the corporation then outstanding and secured by such reserve fund.

(2) The corporation shall not issue bonds at any time if the maximum

amount of principal and interest maturing and becoming due in a

succeeding calendar year on the bonds outstanding and then to be issued

and secured by a debt service reserve fund will exceed the amount of

such reserve fund at the time of issuance, unless the corporation, at

the time of issuance of such bonds, shall deposit in such reserve fund

from the proceeds of the bonds so to be issued, or otherwise, an amount

which together with the amount then in such reserve fund, will be not

less than the maximum amount of principal and interest maturing and

becoming due in any succeeding calendar year on the bonds then to be

issued and on all other bonds of the corporation then outstanding and

secured by such reserve fund.

(3) In computing any debt service reserve fund for the purposes of

this section, securities in which all or a portion of such reserve fund

shall be invested shall be valued at the lower of cost or market value.

(4) With respect to any project, the corporation may create and

establish a special fund to be known as the project reserve fund and

deposit therein (a) such amount as may be determined by the corporation

in connection with any lease by the corporation to others to be charged

to such lessee for deposit in such fund, and (b) any other moneys which

may be made available to the corporation for the purpose of such fund

from any other source or sources. All moneys held in or credited to any

project reserve fund shall be first used for the payment of the

principal of and interest on the bonds or notes of the corporation

issued for the project secured by such project reserve fund in the event

that other moneys of the corporation, other than moneys held in the debt

service fund, are not available for such purpose. Upon the retirement of

the bonds or notes of the corporation issued for the project secured by

such project reserve fund, moneys so held in such fund may be used by

the corporation for any lawful purpose.